Insurance intermediary and risk advisor Marsh has unveiled an insurance solution tailored for the global transportation and storage of CO₂.
The global offering, crafted by Marsh’s Energy & Power team and underwritten by Canopius, aims to surmount insurance barriers that have impeded the carbon capture and storage (CCS) sector’s growth.
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It extends beyond traditional insurance, which typically necessitates physical damage or operational disruption for policy activation.
Marsh’s solution introduces a non-damage trigger for CO₂ geological leakage, covering corrective measure costs and potential business interruption.
Additionally, it indemnifies the expenses to procure carbon credits in case of CO₂ leakage, applicable across the entire removal chain.
This indemnification applies throughout the entire removal chain, covering leaks that may occur from scheduled onshore facilities, the CO₂ pipeline or ship, or the storage complex itself.
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By GlobalDataMarsh Specialty global carbon capture and storage initiative leader, energy and power Hannah Jennings said: “Carbon capture and storage has a fundamental role to play in reducing emissions globally and delivering the net zero energy system.
“Marsh Specialty’s new solution not only represents a meaningful shift in the parameters of traditional energy insurance but also delivers greater certainty and confidence to investors, governments, and regulators.”
Canopius group chief underwriting officer Sam Harrison said: “It is our job to find solutions to address the as-yet unknown risks associated with these new, exciting technologies. But that does not mean we are working in the dark – we have decades of experience in finding solutions for traditional upstream energy resource risks, and we can put that experience to work in these new fields.
“Working with our partners and their clients, we can take learned lessons and find new, innovative ways of addressing tomorrow’s challenges.”
Earlier in 2024, UK-based Howden also stepped into the CCS insurance fray with a facility that addresses CO₂ leakage from large-scale CCS projects.
Developed alongside SCOR’s syndicate at Lloyd’s, Howden’s product covers environmental harm and revenue losses from both sudden and gradual CO₂ releases.
